Research News and Events
Posted October 29, 2011
Professor David Geltner won the prestigious James A. Graaskamp Award, making MIT the only academic program anywhere to have two recipients on the same faculty (Professor Bill Wheaton shared the award in 2007). Presented at the Pension Real Estate Association Conference, the Graaskamp Award honors important research in the area of institutional investment in real estate. Learn more...
September 16, 2011
The short answer is that we're mighty close! As reported by Wall Street Journal blogger Dawn Wotapka, the 1K House project – brainchild of MIT/CRE Chairman Tony Ciochetti – has been implemented in China by MIT Department of Architecture grad Ying chee Chui. Read Wall Street Journal blog and see MIT News Office article.
Posted July 20, 2011
The nation's economic recovery is still struggling, due largely to a serious imbalance in the US housing market -- this according to MIT/CRE economist Bill Wheaton and his research partner Gleb Nechayev. To give the economy a needed boost, Wheaton and Nechayev propose a two-pronged solution providing incentives to the crucial players -- borrowers and lenders in the housing market. Read article…
Media Cites MIT/CRE Index as Commercial Properties Surge
Posted February 7, 2011
Posting the second-largest gain on record, prices of commercial properties sold by institutional investors surged 19 percent in 2010 – a fact revealed by MIT/CRE's Transaction Based Index. The Wall Street Journal joined Bloomberg Businessweek and CNBC in citing the TBI's results, which may indicate an important milestone in the recovery. Quoted in the Wall Street Journal, the Center's Director of Research David Geltner said that other segments of the commercial real estate market will likely follow the rebound as demand spills over and capital follows. He added, however, that while these dramatic gains are encouraging, "It’s a bounce from a bottom. It’s not a surge from some normal level." Read TBI press release...
Posted January 24, 2011
Fresh analysis by Gleb Nechayev and MIT/CRE professor Bill Wheaton answers that question by examining the trend in housing prices over the last four decades. The two economists consider whether current house prices in a variety of markets are above or below that trend, then explain why this "trend approach" has true economic meaning. Read article...
2010 MNM Symposium
Posted November 30, 2010
MIT, the National University of Singapore, and Maastricht University brought together researchers from around the world for the Annual MNM Symposium, this year held at MIT’s Endicott House from November 18-20, 2010. Nine research papers were discussed with topics ranging from Commercial Property Price Indexes to CMBS Default Behavior. Attendees included David Geltner, MIT Center for Real Estate; Piet Eichholtz, Maastricht University; and Seow-Eng Ong from the Nation University of Singapore. As in previous years, a special issue of The Journal of Real Estate Finance and Economics will be devoted to the symposium. On Friday, MIT Engineering Systems Professor Christopher Magee offered an Engineering Systems Perspective on Real Estate.
Posted November 2, 2010
MIT/CRE graduate Tony Feng '10 has won the 2010 Thesis Award from the MIT Alumni Association for the Center for Real Estate (AACRE) sponsored by New Boston Fund. Entitled "Property-Level Performance Attribution (PPA): Demonstrating a Practical Tool for Real Estate Investment Management Diagnostics," Feng's thesis explores the real-world application of PPA analysis and demonstrates its potential as a tool for a firm to judge the strengths and weaknesses of its investment management approach. Read abstract.
Posted September 10, 2010
The US mortgage pool is currently suffering from two major problems — (1) nearly a quarter of mortgages are "under water," and (2) unemployment fueled by the recession is triggering more delinquencies and defaults. To repair the first problem and help with the second, MIT/CRE Professor William Wheaton has proposed a restructuring of existing mortgages that provides protections and incentives for both homeowners and lenders. Read proposal...
Student Research Featured in Reuters Article
Posted August 29, 2010
Real estate looks like the next big thing for Soveriegn Wealth Funds (SWFs) according to a Reuters article profiling thesis research by two MIT/CRE students. Co-authors Pulkit Sharma and Yoohoon Jeon, slated to graduate from MIT in 2010, found that SWFs could invest up to almost $290 billion a year in real estate — nearly a tenth of their assets — over the next five years to hedge their volatile source of wealth. Read article.
Grads Win 2nd Award for Thesis Research
Posted August 11, 2010
Alumni Ben Bulloch '09 and John Sullivan '09 have been awarded the "ING Most Outstanding Article by a Graduate Student Award" from the Cornell Real Estate Review. The journal invited them to submit a paper after learning about their MIT/CRE thesis — entitled Application of the Design Structure Matrix (DSM) to the Real Estate Development Process — a thesis that previously won the Annual Thesis Award co-sponsored by the New Boston Fund and MIT's Alumni Association of the Center for Real Estate (AACRE). Read MIT/CRE profile of the grads & their work, as well as Cornell RE Review article.
Posted May 20, 2010
East Africa is one of the largest single-bloc regional markets in Africa, and it is rapidly transforming from an agricultural to a service economy. Yet amid this transformation, 40% of Kenyans are unemployed, many living in inadequate housing. Center Chairman Tony Ciochetti recently traveled to Kenya to introduce the 1K House, the visionary MIT/CRE project that seeks to design reliable and sustainable houses for the phenomenally low price of $1000 apiece. Read article...
December 30, 2009
"Residential investment is no longer a drag on the U.S. economy," states MIT/CRE Professor William Wheaton in an article with collaborator Gleb Nechayev. Research by the two economists suggests that residential investment in fact will be a major driver in the economic recovery, "a sleeping giant...about to wake up" Read article...
Posted November 20, 2009
What do you get when you cross MIT's $100 Laptop concept with the MIT Center for Real Estate? The answer is the 1K House Project, which aims to build houses for the phenomenally low cost of $1000 apiece. With 1.5 billion of the world's inhabitants living on less than a dollar a day, MIT/CRE wants to make housing affordable even for those who face extreme poverty. Learn more.
Posted July 3, 2009
The latest data from the Moody's/REAL Commercial Property Price Index (CPPI) is turning heads at major media outlets. CNBC was just the first to cite the index's April data, which shows the largest single drop in commercial property prices since the market peak in October '07. The previous record drop of 5.5% was in January of this year, suggesting that the decline is accelerating, and causing some to wonder if the market is finally bottoming out. Methodology for the Moody's/REAL CPPI was developed by MIT/CRE.
May 30, 2009
Citing a research paper he wrote with fellow researcher Gleb Nechayev, MIT/CRE Director William Wheaton said that the key to the U.S. housing market rebound -- which may take another two years -- could be first-time home buyers and property investors. In an interview with the MIT News Office, Wheaton outlined this scenario for market recovery. Read interview.
May 29, 2009
In a column entitled "Why Your Mortgage Won't Make You Rich," Wall Street Journal writer Brett Arends refers to Center research to say that "home owners may end up earning less over the course of their lives than renters do." The work he cites is by MIT/CRE Professor Lynn Fisher, whose eye-opening research suggests that renting a home can sometimes be superior to owning it. Read WSJ column and learn more about Professor Fisher's research.
MIT/CRE's "Mainer" Study Shows Need, Prompts Legislative Action
March 25, 2009
News outlets from USA Today to the AARP Bulletin, Exception Magazine, and Maine Public Broadcasting Network are citing a new study by the MIT/CRE's Housing Affordability Initiative (HAI). Developed in partnership with the Maine Affordable Housing Coalition, the study reveals that more than 86,000 low-income families in Maine are spending more than 50% of their income on housing costs. Home prices and rents have risen faster than personal income since 2000, according to the study, creating a housing problem made worse by Maine's relatively high fuel costs and a loss of available rental units. HAI results are playing a key role in shaping legislation that seeks to promote affordable housing in Maine. Learn more about the Center's Housing Affordability Initiative.
As Commercial Prices Plummet, National Media Gets the Numbers from MIT/CRE Index
February 7, 2009
The release of the latest figures from the Center's quarterly Transactions-Based Index (TBI) shows that commercial property prices in the final quarter of 2008 fell at the fastest rate on record. National media outlets have cited the TBI to show how quickly the housing crisis has spread from real estate's housing sector to its commercial sector. See articles from Reuters, the Dallas Morning News, the Motley Fool investment network, and CNBC. See also the latest TBI press release, as well as background on the Center's TBI initiative.
December 4, 2008
New research by Professor Lynn Fisher shows that -- in spite of the widely held belief that home ownership is always preferable -- renting can be the superior alternative. Specifically, her research shows that those who own homes tend to earn lower wages because they are less mobile, and so are not as responsive to changes in labor market demand. Learn more.
Posted December 5, 2008
MIT/CRE graduate Anthony Guma '08 has been selected to receive the 2008 Thesis Award from the MIT Alumni Association for the Center for Real Estate, sponsored by New Boston Fund. Entitled "A Real Options Analysis of a Vertically Expandable Real Estate Development," (pdf, 2.5M) Guma's work researches the value and feasibility of developing urban sites with the option to add more space vertically in the future. Read full article.
Posted December 4, 2008
Cities consume most of the world’s natural resources and emit most of the pollutants. They are also growing at an unprecedented rate. Addressing the need for a comprehensive solution, the MIT Sloan Convocation 2008 is presenting a series of webcast discussions between research faculty and industry experts to explore opportunities for true sustainability. See webcast.
May 16, 2008
A recovery of the real estate market is "in the works" — that’s the good news from William Wheaton, MIT/CRE Professor of Economics. Wheaton shared his news as keynote speaker for the annual AACRE spring symposium, which on May 16th drew a large crowd of real estate professionals, alumni, and students to the MIT Faculty Club. Along with his upbeat forecast, Wheaton stressed that when and how the recovery will occur still remain to be seen. Read full article.
WSJ Focuses on Wheaton, Who Suggests Fears of Housing Slump May Be Seriously Overdone
March 24, 2008
The Wall Street Journal spotlighted analysis by MIT/CRE Professor Bill Wheaton, who offered a brighter view of market conditions than the gloomy one now in vogue. The Journal noted Wheaton's successful record of independent thinking, reminding readers that "Mr. Wheaton is no perma-bull. Quite the reverse: he was warning about the coming real estate crash back when the usual hallelujah chorus were singing and clapping their hands." Download article (pdf, 23K) or visit WSJ online.
Boston Herald Cites MIT/CRE Indexes as "Commercial Real Estate Prices Tank"
February 6, 2008
"Commercial real estate prices are tumbling across the country in a decline not seen since the devastating recession of the early 1990s, a new MIT report finds. The value of commercial real estate owned by major U.S. pension funds fell 5 percent in the fourth quarter, according to a commercial market index produced by the MIT Center for Real Estate. The drop was nearly twice the 2.5 percent decline seen in the third quarter." Read full article.
February 5, 2008
"The value of U.S. commercial real estate owned by big pension funds fell five percent in the fourth quarter of 2007, twice the drop of the third quarter, according to an index from the MIT Center for Real Estate. The transaction-based index (TBI) tracks the price at which big pension funds buy and sell commercial properties, which include shopping malls, apartment complexes and office buildings. The cumulative fall since last year’s midsummer peak is now more than 7 percent." Read full article.
February 5, 2008
"The value of U.S. commercial real estate owned by big pension funds fell another 5 percent in the fourth quarter of 2007, according to an index produced by the MIT Center for Real Estate.... 'This is evidence that the commercial property market continued to fall, and at an accelerated rate, through the last quarter of 2007, no doubt due to the effects of the credit crunch,' said MIT Center for Real Estate Director David Geltner." Read full article.
posted December 7, 2007
If you own a car and live or work in a major city, you've doubtless had the experience of circling block after block looking for a place to park. How much time and gas did you waste before your "parking angel" finally came through? William J. Mitchell has wondered as well. In a guest lecture at MIT/CRE, the Director of the Design Laboratory at MIT's Media Lab presented his team's City Car, a revolutionary concept vehicle that could dramatically raise urban transportation's efficiency and lower its environmental impact. Read more.
October 12-14, 2007
This annual real estate symposium — hosted this year by MIT/CRE — featured breaking research on real options, Asian real estate, & much more. In a talk about engineering systems applications to real estate, researchers from MIT's Engineering Systems Division showed how developers could save significant time and resources by designing buildings for flexibility. Read article.
September 26, 2007
The Pension Real Estate Association (PREA) as announced that MIT/CRE Professor William Wheaton and his business partner Raymond Torto have been awarded the 2007 PREA Graaskamp Award. Granted every other year, the award is among the most prestigious in the real estate investment industry, recognizing those "who contribute to the common body of knowledge some practical insights gained through significant research." The award is named in memory of the late researcher Dr. James A. Graaskamp, a distinguished professor of real estate at the University of Wisconsin, "a champion of research of immediate use to investment decision makers." The award winners will designate MIT/CRE as the recipient of the award's $10,000 scholarship.
June 18, 2007
MIT/CRE's Housing Affordability Initiative today released the findings of its exhaustive investigation into the Chapter 40B permitting process. Results are surprising, and include evidence that even though a majority of Chapter 40B zoning override cases in the Boston area are approved by town zoning boards in a manner acceptable to developers, many projects are not being built. Read press release. Read full report.
May 10, 2007
MIT/CRE's Professor Lynn Fisher and Research Associate Henry Pollakowski, along with Tufts Professor of Economics Jeffrey Zabel, just received word that they won Best Paper Award for their offering at the 11th Asian Real Estate Society (AsRES) annual conference in Vancouver, June/July 2006. Sponsored by the Royal Institute of Chartered Surveyors (RICS), the award will be shared by the researchers for their paper "Job Accessibility-Based Housing Affordability Indexes."
January 30, 2007
Finalization of calendar year 2006 results shows another very strong year for private institutional real estate investment performance, with the all-property total return for CY 2006 at 18.5%, including 14.5% price gain. While less than 2005's historical 22-year record high of almost 34%, this still represents an impressive investment performance well above the long-run average. The office sector led with a 21% total return including 18% price growth. Learn more.
January 19, 2007
The groundbreaking real estate indices jointly launched by MIT/CRE and Real Capital Analytics (RCA) are among a number of indices just released, as reported in Institutional Investor's Real Estate Finance & Investment. Until recently, only a few commercial real estate indices existed, but the past year has seen the launch of numerous new indices, largely to spur the growth of derivative trades on commercial real estate.
As a part of MIT's January IAP session, Professor Wheaton is presenting a talk on the current housing market in terms of historic housing prices and their relation to income, cycles caused by a contracting economy, true housing corrections, and other related topics.
December 20, 2006
The latest results of the RCA-based commercial property index provide solid, quantitative evidence of the magnitude of the 2003-2005 commercial investment property bull market in the U.S., and indicate that the "boom" period ended early in 2006 for the broader market. Read the MIT-RCA press release.
September 29, 2006
New graduates of the MIT Center for Real Estate's MSRED program shared surprising results from their thesis research as a part of Graduation Weekend 2006. Arvind Pai showed that core real estate pricing violates stock market behavior -- but in a systematic way. Kristen Wang's work revealed innovative financing used by public housing authorities. John Harris Morrison showed that private local investors buy the smallest properties, but earn more doing it than do larger firms.
September 29, 2006
The Commercial Real Estate Data Laboratory (CREDL) at the MIT Center for Real Estate has developed indexes that not only track market movements better than previous indexes, but also can be used to create powerful new investment tools— real estate derivatives. David Geltner, Director of MIT/CRE, discussed the new indexes at the Center's graduation weekend on September 29.
Banker & Tradesman, March 6, 2006
After depending for years on anecdotal evidence to determine the reasons behind Massachusetts’ high housing costs and difficulties developing new affordable housing, new studies help housing and smart-growth groups to back up their stories with numbers.
Wall Street Journal, February 22, 2006
"It's a major event for all of those people whose pension money is being invested," says Henry Pollakowski, the principal research associate at MIT's Center for Real Estate and co-director of this research initiative. "It's clearly the case we know from history that this can't be sustained."
February 22, 2006
Annual investment returns for U.S. holdings in commercial real estate — a sector favored by big pension funds — hit an unprecedented high of 34 percent in 2005, according to the MIT Center for Real Estate. These results were announced with the launch of MIT/CRE's Transactions-Based Index (TBI).
January 31, 2006
New single-family home construction in the greater Boston metropolitan area is consuming about twice as much land as existing single-family housing, and half of the region’s 30,387 recent new single-family homes were built on lots of nearly an acre or larger, according to a new study by the Massachusetts Housing Partnership (MHP) and the MIT Center for Real Estate.
Banker & Tradesman, January 30, 2006
Newly constructed homes in Greater Boston are taking up more land, with half of the region’s new single-family houses built on nearly an acre of land or more, according to a recent study.
Technology Review, October 2005
Housing affordability is a complex issue. States and communities cannot develop appropriate housing policies without understanding just what affordability means. Through its new Housing Affordability Initiative (HAI), the MIT Center for Real Estate is helping the housing industry to do that.
Banker and Tradesman, May 30, 2005
Winchester, Hopkinton, Norwell, and Sudbury have one thing in common: all four communities are among more than two-dozen Greater Boston municipalities that could use more affordable rental housing, according to a newly developed index.